The province is expected to spend R26.55 billion on health and R7.4 billion on transport in the next year. Most of the budget will be funded by allocations from National Treasury and conditional grants from national government.

Cronje said the province's economic growth rate of 3.32% in 2011 was slightly down on 3.36% in 2010. "Although the national and provincial growth experienced during 2011 was slightly lower than in 2010, it could have been much worse given the international economic turmoil and uncertainty."

She said unemployment in the fourth quarter of 2011 stood at 19.33%. "In terms of the expanded definition, unemployment, which includes discouraged work seekers, dropped slightly from 36.8% in the third quarter to 36.56% in quarter four."

At a technical briefing prior to Cronje delivering her budget, head of the KwaZulu-Natal treasury Simiso Magagula said the provincial government had eliminated all bank overdrafts. The resultant saving on interest payments had helped the provincial government to increase its resources. He also expressed concern at the increases in the public sector wage bill and whether productivity would keep pace with such increases.

The provincial government expects to pay its employees some R46.43 billion in 2011/12 and this wage bill is expected to increase to R54.7 billion in 2014/5 -- an increase of almost 18% over four years. The bulk of the wage bill is for the payment of education department staff, followed by provincial health department employees. Cronje's budget includes setting aside about R1 billion each year for the next three years for contingencies.

She warned that the contingency reserve was "not meant to be a bail out in cases of poor budget management, but a cushion for unforeseen expenditure". Of the R13.5 billion allocated to infrastructure, the province would spend about 40% on transport, with most of this concentrated on the backlog in road maintenance.